Problem: The positive number $a$ is chosen such that the terms $20, a, \frac{5}{4}$ are the first, second and third terms, respectively, of a geometric sequence. What is the value of $a$, if $a$ is positive?
Explanation: Let the common ratio of the geometric sequence be $r$. We have the equations $20\cdot r = a$ and $a \cdot r = \frac{5}{4}$. In the first equation, we solve for $r$ to get $r=\frac{a}{20}$, and substitute this into the second equation to eliminate $r$, resulting in $a \cdot \frac{a}{20} = \frac{5}{4}$, or $a = \boxed{5}$.